The Arlington County Board approved a $250,000 grant to Signature Theatre on Tuesday as the parties reconsider Signature’s lease and tax arrangements. The move, approved in a 5 to 0 vote, covers $85,000 of Signature’s tax bill and is part of ongoing financial discussions between the county and the theater.
“Signature is not in trouble,” managing director Maggie Boland emphasized Thursday of the Shirlington troupe, which is nationally acclaimed for its musical productions. “But one of the ways we’ve stabilized is by controlling expenses. This is a significant expense.”
Michelle Cowan, the county’s director of management and finance, says, “This gets them current on their taxes and gives them room for the next year or so on their major taxes.”
The county agreed with Signature that it was carrying a tax and facility load not paid by other arts groups in county spaces. Tuesday’s vote does not permanently change Signature’s tax status with the county, but talks, which have been going on for months, continue.
“This is a step in the reevaluation of our lease agreement with the county and making it sustainable in the long term,” Boland said.
In 2007, Signature expanded into a new, two-theater complex. Signature pays $90,000 in rent to the county, or 2.5 percent of its annual ticket sales, whichever figure is greater. Over the next three years, that formula is scheduled to escalate to 10 percent, although Cowan and Boland say that a different long-term deal might emerge.
Boland said Signature has an annual budget of $6 million to $7 million, earns 55 percent of its income and is on track to show a surplus for the third consecutive year. The company is also shouldering a construction loan of $10 million. Boland said $7.8 million is still owed on the loan over the next 10 years.
The economics of Signature are particularly challenging, even by the always-uphill standards of nonprofit theaters. The troupe, which was awarded the regional theater Tony Award in 2009, produces large-scale, labor-intensive shows while having comparatively few seats to sell in its 276-seat main theater. (Broadway houses have at least 500 seats.) The current production of Stephen Sondheim’s “Company” features 14 actors and nine musicians.
According to the county, Tuesday’s grant was paid for out of savings from last year’s budget.
“They really do bring people to Shirlington,” Cowan said of Signature. “That puts them in a little different category.”